More than 80 years after World War II, signs of collapse in Iran’s economy are reappearing with the same intensity.
Inflation in Iran in 2026 has reached a level that many consider unprecedented in contemporary history. The 73% year-on-year inflation rate in March and April is not merely a statistic, but a sign of a deep crisis within the economic structure of the Iranian regime’s system of absolute clerical rule. This level of inflation, especially in post-war conditions and amid escalating political tensions, recalls periods when the country’s economy simultaneously collapsed under severe external pressure and domestic mismanagement.
Inflation in Iran; A Structural Crisis Beyond Governments
Inflation in Iran is not a temporary phenomenon, or one tied to a specific administration. This crisis is fundamentally rooted in the economic structure of the Iranian regime and has been reproduced over decades. Chronic dependence on oil revenues, permanent budget deficits, and an inefficient banking system are the three main pillars of this crisis.
In such a structure, every external shock—from war to sanctions—rapidly leads to increased liquidity and rising prices. The recent war and the uncertainty resulting from it have merely acted as catalysts, not the primary cause. In fact, inflation in Iran had already stabilized above 30% before this and has now simply entered a new phase of intensification.
One of the dangerous features of this period is the chronic nature of high inflation. Unlike the World War II era, when inflation was severe but short-lived, Iran’s economy today has experienced more than seven years of persistently high inflation. This continuity reflects the complete inability of the regime’s decision-making structure to control the crisis.
On the other hand, the policies announced by economic institutions under the regime’s control have not only failed to curb inflation, but in many cases have contributed to concealing reality. One example is the heavy weighting of the housing sector in the inflation index, which due to temporary price stagnation moderates the overall inflation picture. However, this statistical adjustment has no effect on the reality of people’s lives.
Smaller Dining Tables; The Social Consequences of Inflation in Iran
Inflation in Iran is most visible at people’s dining tables. The sharp increase in food prices has caused inflationary pressure on lower-income groups to be far greater than on other segments of society. This situation has not only intensified inequality but has also led to the gradual collapse of the middle class.
A 73% increase in the cost of a specific basket of goods and services has occurred under conditions where even a 60% rise in wages has failed to preserve purchasing power. This gap between income and expenses means a real decline in living standards.
In sectors such as healthcare and medical treatment, the situation is even more critical. Rising prices for medicine and medical services, especially after the war, have placed additional pressure on households. Unlike other consumer goods, these expenses cannot be postponed and are directly linked to health and survival.
The housing market is also on the verge of a new inflationary surge. Although relative price stagnation is currently visible, the doubling and tripling of construction costs indicates that this stagnation will not last. Passing these costs on to consumers will create a new wave of inflation in the near future.
Meanwhile, the role of the political structure in intensifying the crisis is undeniable. By prioritizing political and military objectives over the economic needs of society, the system of clerical rule has allocated the country’s limited resources in a way that has resulted in worsening inequality and poverty.
Ultimately, inflation in Iran is not merely an economic phenomenon, but also a social and political crisis. This crisis has eroded public trust and darkened the outlook for the future.
If inflation in the 1940s was the result of foreign occupation and world war, today this phenomenon is largely the product of the internal power structure. The main difference is that today’s crisis is not temporary, but persistent and self-reproducing.
This continuity shows that the problem lies not in policy tools, but in the structure itself—a structure that is not only incapable of solving the crisis but is itself the source of producing it.
